Why Russian founders of global companies cannot come to terms with reality, as illustrated by Playrix, DataArt, and Luxoft
The publisher and Editor-at-large of AIN.UA, Ilya Boshnyakov, reflects on how companies having employees in Ukraine and Russia cannot decide if they condemn the war or simply try not to notice what is going on around, censoring their communications and striking dubious deals.
“Thought it was all going to end in several days,” it might seem to be a quote from Christian Lindner, the German Minister of Finance. He gained wide notoriety after denying help to the Ukrainian Ministry of Foreign Affairs in a cynical manner on the first day of the war. However, this is not him. These words were said by Igor Bukhman, the co-founder of Playrix, commenting to Forbes on the belated, and in places still zero, reaction to the war in Ukraine.
The total wealth of the Vologda natives Igor and Dmitri Bukhman, who emigrated to London in 2020, is estimated at $16 billion. And Playrix itself, with annual revenue of $2.7 billion, is considered the fourth largest game publisher globally, after China’s Tencent, NetEase, and Activision. In Ukraine, Playrix employs about 1,500 people, who work in Kyiv, Rivne, Odesa, and Kharkiv, both for the company itself and for the studios that were mostly acquired by Playrix in 2020–2021. In total, there are seven studios — Zagrava, Boolat, 4Friends, Home games, Daily Magic, Perfect Play, and VOKI. The latter is part of the splintered Ukrainian studio ERS Games and its name, according to an employee commenting, is short for VOlogda KIev.
Playrix has another 1,500 staff in Russia, where the company emerged and earned its first capital. Apart from 10% of staff who relocated, there are no changes to expect. The lack of resolution of this issue has caused so-called “outbursts of uncontrolled hatred between employees.” In response to them, Playrix imposed censorship in the very first days of the war: “political” discussions have been simply deleted from the corporate Slack.
“We fear that, instead of dialog and support, in the working chats, there will be conflicts, which no one will benefit from,”said Playrix in response to a query by its workers from an internal chat, as cited by the journalist Daryna Antoniuk.
“One of such decisions is to temporarily close all mass channels, except #company-updates and studio channels. It is difficult for us to communicate constructively on Slack. We don’t forbid anyone to express their opinion publicly. The only thing we’re asking is to keep at least a few channels for business communication,” Bukhman said in an appeal to employees.
“But this is ridiculous, because expressing one’s opinion is exactly what they would not let us do; they would delete all the comments. I saw that, and they also deleted mine,”says a Playrix employee, who wished to remain unnamed, in her comment to AIN.UA.
“We are literally between two fires. It’s difficult for us to make decisions but we must do it,” Bukhman described the situation at the beginning of March.
“I don’t see the company change its position somehow over a month. Now, all chats are closed, except for the very official ones, where nobody but the management can write anything. Now it is so quiet in Slack, and it was never the case before,”AIN.UA’s source reports.
The US Forbes says that the position of Playrix’s owners has evolved significantly since the “out of politics” stance of February 24. Indeed, a statement appeared in early March, its main quotes being, “what happens now is a tragedy” and “stop the war.” There is no need to explain to the Ukrainian audience that such words are but a good old lack of one’s own position. Who is it that Playrix’s founders ask to stop the war? In their opinion, who is to blame for the tragedy? It is unclear what evolution the US Forbes is referring to here. Besides, the founders understand this themselves too.
“On the social media, Dmitri and I have expressed our support to Ukraine in words that we could use. But we have 16 offices and 1,500 employees in Russia. We cannot speak openly now because we are responsible for our staff and families,”Igor wrote to the employees on March 4.
Here we see an attempt to elicit sympathy and a repetition of the popular Russian narrative – the unconscious irrational fear of Russia. In fact, many dozens of companies, including those of Russian origin, have already made statements and are actively moving out from the country, while nothing threatens them or their families. It is hardly possible that people who were able to build a billion-dollar company cannot see or evaluate the events around them. It is also hard to imagine that, when the cynical plan A, “It is all going to end in several days,” didn’t work, the 4,000-strong company didn’t have, and in six weeks, didn’t come up with, a plan B. Of course, unless their plan B is to stay and keep silent.
The Bukhmans’ situation, as represented by the American Forbes magazine, does not evoke any compassion. Yes, they comment to media on how difficult their choice is, with the markers “we fear,” “it’s painful,” and “we are between two fires” being constantly repeated. But these are not emotions. It is precisely Russia that nearly 40% of Playrix’s $2.7 billion earnings come from. This is what the second line of fire from the Bukhmans’ quote “We are literally between two fires” actually means, and not the wish to protect their Russian employees, as Forbes puts it and as Russians themselves probably think.
When Lindner said to Ukraine on February 24, “You only have a few hours. Supplying arms or disconnecting Russia from SWIFT is pointless,” he also acted on the basis of cynical and pragmatical considerations. Except that Germany has changed its position since then.
DataArt called this war “the war” and Russia “the aggressor” from the very beginning. However, its executives often use popular Russian narratives that are totally unacceptable to the employees in Ukraine and other countries.
Currently, DataArt has $290 million in revenue and 5,700 employees in total, including 2,000 in Ukraine and 1,700 in the Russian Federation. Our editorial board got a bunch of corporate briefs from the executives to the employees. For example, Alexei Miller, the Managing Director at DataArt, repeated in his letter dated March 14 the popular cliche that Russians are not responsible for the Russian government and that he acted for fear for Russia. For some reason, the companies are afraid of Russia more than of the risk of losing a good reputation both in Ukraine, where Miller and his team moved a long time ago, and in other countries. Here are four main ideas from the letter:
“If we fire or let our colleagues stay in Russia, Putin’s regime will only win and hire them to develop ‘national software.’”
“We are forced to be careful with official statements — now you can get 15 years in jail for a wrong word in Russia, lose your entire company that could be nationalized, and then we wouldn’t be able to help anyone.”
“Don’t believe the loud statements and press releases of competitors. They could say, “we left Russia.” It’s easy. But almost all of them kept their people working in Russia but under a different name.”
“Don’t equate Russians with their government.”
Eugene Holland, the CEO at DataArt, wrote a more serious letter at the beginning of April where he explained to the employees the real state of the case that Russian propaganda is trying to hide. According to this letter, DataArt acts following some undercurrents in the world economy and society, but not based on its own choice to cancel its activities in the country that attacked Ukraine on February 24:
DataArt did not have a choice regarding the exit. We can’t cooperate with what Russian government has become and we are also experiencing massive and accelerating difficulties sending money to Russia.[…] With a heavy heart, I must admit that change to the worst is unavoidable to such a degree that co-existence with the regime would not be possible for all groups of DataArt stakeholders even if it would be in our power to resolve technical issues. There is some inertia in the system, and the full impact of the change is not yet visible, especially from inside Russia, but the change has already happened for anyone who is willing to inspect it with open eyes. […] Cooperation with a Russia-based entity is now seen by the business elite (and increasingly business in general) as help to the regime. Businesses that could get comfortable with it are getting to be hard-pressed by employees and other stakeholders to stay away for the sake of depriving an aggressive state of the resources. We are already experiencing this escalating pressure on all levels: clients, investors, auditors. […] Those who decide to go, face a myriad of difficulties, including unfairly unfriendly predisposition by those who do not separate people from the state.
Holland’s letter looks more honest than the declaration of DXC/Luxoft that they are proud of leaving Russia, where the company has been founded and operated since 2000, where it developed solutions for the Federal Tax Service, Post of Russia, and Russian banks: Alfa-Bank, VTB, Promsvyazbank, and Sberbank.
The company with 3,900 employees in Ukraine made a statement at the beginning of March, but it’s not the end of the story. It appeared that the Russian Luxoft workers got offers in March to switch to another Russian company IT_One.
According to the job offers, the employees will keep their positions and projects, and only the management will change, a Luxoft employee who was among the first recipients said to Forbes.
Such a transfer was offered to those Luxoft employees who got no relocation offer, including specialists working for Russian customers of Luxoft. The source of Forbes said that the workers are allowed to keep their work computers, only set to default settings.
It also appeared that IT_One had another name in December 2020 — Luxoft Dubna, after the name of the scientific city in the Moscow region. The company with 85 employees was acquired from Luxoft for almost $14 million and renamed to IT_One. The new owner was Sergey Matsotskiy. He and Anatoly Karachinsky owned 83% of Luxoft before being sold in 2019.
The AIN.UA editors noted that after 14 months after Luxoft Dubna was sold, for the www.it-one.ru domain, the WHOIS service still showed an entity called Luxoft Dubna, LLC and name servers of Luxoft — ns1.luxoft.com, ns2. luxoft.com, ns3.luxoft.com. It means IT_One was still in a strong connection with Luxoft, which officially was independent, but one day, this connection has gone. This day was February 24, 2022. And this example is not unique.
DXC/Luxoft called the information from Forbes about the non-proper exit of Russia and cooperation with an affiliated company a mistake. This answer was published after the Forbes article. Many companies used to comment on already published materials based on the context.
But all statements of Luxoft and DXC published before don’t answer the essential question. Have there been any agreements between Luxoft and IT_One related to the exit of the Russian market claimed by DXC/Luxoft? The company reps didn’t find time to answer that direct question from the AIN.UA editorial board. We also got no comment on why the it-one.ru’s WHOIS data was changed only on February 24 and why the Luxoft employees went to IT_One together with their work machines.
A specialist of a Ukrainian studio under the Playrix umbrella said, “We are not Wargaming [the developer of World of Tanks, whose decision to leave Minsk was so commented by its employees: ‘The team is now in tranсe; nobody expected that’]”. I am afraid it’s not only about Playrix but all companies whose founders left Russia a long time ago but are still there in their minds.